Our View

No debt atmospheres

August 5, 2011

Ever heard of Jimmy McMillan? Unless you lived in New York recently, probably not. He ran for mayor of New York City and governor of that state under his own party, the "Rent is Too (expletive) High" party. While the rent in New York is high, our national debt as it currently stands makes that, whatever it may be, seem like chump change.

On May 16, 2011 our country officially hit its debt ceiling when the national debt was more than $14.3 trillion and change. The debt ceiling is the amount the government can legally borrow to pay both who they owe money to and into their trust funds.

On August 2, Congress passed a bill that not only raised the debt ceiling, but over 10 years would supposedly cut spending by about $2 trillion. There was also talk to add an amendment to the Constitution on balancing the budget, and another part of the deal was the creation of a bipartisan debt-reduction committee, which would come up with proposals to vote on before Christmas.

First, how can there be a bipartisan committee making proposals on how to lower our nation's debt before Christmas when both Republicans and Democrats couldn't agree on how to raise the debt ceiling until the eleventh hour? There can't be one. There was a bipartisan plan, the Gang of Six plan (Kent Conrad was a part of it), but members of both parties shot that down. In order for a true bipartisan plan to work, both sides would have to not only agree, but have the interests of the electorate and American people at large in mind. This would mean not taking opportunities to snipe at the other party or be a thorn in the side when the President may have an idea that could prove beneficial to our nation.

Second, the government does have to make cuts, but it also has to make reforms, especially in tax revenue. The middle class cannot realistically pay off the national debt in addition to whatever other bills and taxes they may have, and neither can the lower class. The upper class and big business should put money into the pot. There also needs to be reforms in welfare and entitlement so that those who actually need those programs get it, rather than those who subsist on it for all the wrong reasons or those who have the ability and means to get a job but choose not to.

Third, the increase in the debt ceiling affects John and Jane Q. Public too. When the government's borrowing costs go up, so does the cost of borrowing coin for us citizens. The rate of returns also go up on the people's credit cards, mortgages and loans we may have to pay. If someone wants to buy stocks and bonds, their selling prices are lower, as is the worth of that person's bond portfolio. Moody's, a credit rating agency, has a "negative" outlook on us, so our credit rating, which is currently AAA, may drop.

It's common sense that one can't spend money he or she doesn't actually have, so why is our government still doing it? The debt ceiling can't keep being raised again and again, otherwise it will no longer be a ceiling, but a sky or an atmosphere depending on how astronomically high it gets. Maybe we should ask everyone who is running for congressional and presidential seats in 2012 how they will spend our money and how they plan to pay off our national debt.